Rating

8Overall

8
Importance

8
Innovation

7
Style

Recommendation

Not everyone would be comfortable betting on a terrorist attack occurring by year-end, but, undoubtedly, better forecasts for such catastrophes could save lives. While many may be skeptical, prediction markets offer one of the best ways to benefit from the wisdom of crowds, says economist Adam Ozimek. getAbstract recommends this noteworthy overview of the state of US prediction markets and the regulatory obstacles they face.

In this summary, you will learn

Why prediction markets are so effective at forecasting outcomes

What types of contracts these markets offer

What criticisms prediction markets evoke

How a better understanding of these markets would help regulators

Summary

Prediction markets let participants trade contracts that offer payouts based on future outcomes. These “event contracts” deal in news incidents, economic data, asset values or any other topic that has a clear outcome. While prediction markets offer financial benefits to traders, nontraders can use the...